Chinese government investor Chung Fung Metal announced that test runs have been completed at its newly built steel facility, constructed at a cost of ZAR 2.5 billion. The plant is expected to begin full-scale production in the near future.
The factory will produce 600,000 tonnes of long-steel products per year. Operating with electric arc furnace (EAF) technology, the system emits less carbon compared to traditional blast furnaces and supports more environmentally friendly production. The company also stated that it complies with environmental regulations through a water recovery rate of 80% and a zero liquid discharge target.
The new facility has so far created 1,000 jobs, with total employment expected to reach 1,200 as production expands.
This investment brings renewed momentum to South Africa’s struggling steel sector, which has been affected by rising energy costs and competition from cheaper imports. ArcelorMittal South Africa (AMSA), the country’s largest steel producer, has recently halted operations at several of its plants due to financial pressure.
Experts suggest that the new Nigel plant could strengthen domestic production and help meet the steel demand for infrastructure and housing projects. Local municipalities have described the project as a positive development for reviving industrial activity in the region.
Chung Fung Metal highlighted that the plant’s location in the Kaydale industrial zone offers convenient access to transport routes and port connections, making it well-positioned for production and distribution.
However, analysts caution that a full recovery of South Africa’s steel sector will require more than new investments — stressing the need for stable energy supply, cost control, and improved production quality.
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